Small Business Owners

Small Business Owners

Did you know that 65 percent of Americans are small business owners? The average income of these small business owners is over $400,000. According to statistics, there are at least 25 million small business owners in the United States. Only 20 million out of the 25 million have fewer than 50 employees and approximately 17 million small businesses have only one or two employees, including the owner.

Owners can have any type of education to start their own business. Some say it is where the money, action, and brains are. Small businesses have grown 49 percent in since 1982, according to the Small Business Administration (SBA). They generate about 60 to 80 percent of all new jobs in the U.S. economy each year. Some of the most common reasons people become business owners are: flexibility, career control, independence, financial potential, less bureaucracy, and ability to reach ones full potential.

Since computers have decreased in price, it has been easier to start a career in your own home. Although you need to take into consideration that 40% of small businesses fail in the first five years and over 80% fail within the first year.

Starting your own business requires hard work, dedication, and perseverance. You have to start somewhere. But, once you start, and you succeed, people never go back to the careers they had before.

Small business owners need to decide if they want to be a sole proprietorship business or a corporation. They have to weigh in their tax advantages and their limits of liability.

In a sole proprietorship, the owner is responsible for both personal taxes and business taxes. There are no limits of liability. They are financially responsible for both business debt and personal debt. If the business is sued for any reason, a sole proprietorship may have to sell his personal assets as well as the business assets to pay a financial obligation. The corporation is responsible for the business taxes and their limits of liability are limited to corporate assets only.

In this case, it seems to be different. I interviewed the owner of a small business and his wife, who happen to be my parents. Their business is called J & M Lock Shop. It’s a little mom and pop shop that will get you in your car if you are locked out. They also specialize in original key blanks and re-keying locks. They opened their business in March of 1982, three years after they married. They started their business as a sole proprietorship, but as their personal assets increased, they formed a corporation to protect their assets. They were able to open their business with the help of my maternal grandparents who also owned a business in the same field. With my Grandparents’ help, they got the inventory